As previously reported here, former President Obama in December 2016 issued an amendment to Executive Order (“EO”) 13694, which imposed sanctions on the Russian Federal Security Service (a.k.a Federalnaya Sluzhba Bezopasnosti and/or FSB) (“FSB”), other Russian entities and officers of those entities. The Department of Treasury’s Office of Foreign Assets Control (“OFAC”) also placed FSB and those entities and individuals on its list of Specially Designated Nationals and Blocked Persons (the “SDN List”). These sanctions prohibited persons subject to US jurisdiction from transacting business with the FSB and the other entities and individuals named in EO 13694 and the SDN List designations.
In addition to acting as a cyber intelligence agency for the Russian government, the FSB is also responsible for licensing certain communications equipment, electronic devices, software and encryption technology for use within the Russian Federation. Yesterday, OFAC issued a General License authorizing US persons to engage in limited interactions with the FSB to the extent necessary and ordinarily incident to: (i) obtain the type of licenses, permits, certifications, notifications or registrations from FSB which are required in order to import, distribute or use certain information technology products within Russia, and (ii) comply with law enforcement, administrative actions, investigations, rules and regulations administered by the FSB. This General License also authorizes payments of up to $5,000 in certification fees to the FSB within a calendar year, but clarifies that exports of goods or technology to the FSB in transactions where it would be purchasing as a customer remain prohibited. To the extent that the FSB registration process might involve sharing products or information with FSB for its review, persons subject to US jurisdiction must first obtain all licenses or authorizations from US Department of Commerce’s Bureau of Industry and Security’s (“BIS”) which would be necessary in order to export controlled items, technology or commodities to Russia.
Husch Blackwell LLP’s export controls and sanctions compliance team is closely monitoring export sanctions developments. Please contact Cortney Morgan, Linda Tiller or Grant Leach if you have any compliance questions related to yesterday’s General License or any other U.S. sanctions programs.